Transferring a Help to Buy ISA to a Lifetime ISA

Two ISAs that can help you save for a first home

What's the difference?

The Help to Buy ISA and Lifetime ISA are types of individual savings accounts introduced by the government to help you buy your first home. When you use your savings from either to buy your first home you can benefit from a 25% government bonus.

The Help to Buy ISA is now closed to new applicants, but if you have one you can continue paying into it until 2029. If you're in this situation - should you consider transferring it into a Lifetime ISA?

Let's explore some of the similarities and differences between the two.

Help to Buy ISA

The Help to Buy ISA is now closed but if you have one you can continue to make monthly payments up to £200. You'll receive a 25% bonus (up to £3,000) when you use it to buy your first home, as long as you pay £250,000 or less (£450,000 or less in London).

Once it is certain the transaction will go ahead, your solicitor or conveyancer will claim the 25% bonus between exchange and completion. This means you can't use your Help to Buy ISA savings for your deposit.

Help to Buy ISAs are all held in cash, not invested in stocks and shares.

Lifetime ISA

A Lifetime ISA can only be opened by UK residents aged 18-39. You can pay in up to £4,000 each year in regular payments or a lump sum.

Unlike the Help to Buy ISA the 25% government bonus is applied each month based on the amount paid in. You can use the money to buy your first home (up to £450,000) or for your retirement at 60. If you withdraw from it for any other reason it is subject to a 25% penalty.

Your Lifetime ISA must be open for 12 months before you can use it to buy your first home.

Lifetime ISAs can be invested in cash or stocks and shares (OneFamily only offers a stocks and shares Lifetime ISA).

Time to transfer?

Whether to transfer your Help to Buy ISA to a Lifetime ISA is your decision, and the right course of action depends on your individual circumstances.

You can transfer up to £4,000 into a Lifetime ISA subject to your other annual Lifetime ISA contributions.

If you choose to invest in a stocks and shares Lifetime ISA understand that investments of this nature don't offer the same security as cash. Investments in stocks and shares can fall as well as rise, so this may mean you could get back less than you paid in.

Read to transfer your Help to Buy ISA to our Lifetime ISA?

Find out more about our Lifetime ISA and apply today

Open a Lifetime ISA

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